Discounting climate change

Discounting climate change

In this paper I offer a fairly complete account of the idea of social discount rates as applied to public policy analysis. I show that those rates are neither ethical primitives nor observables as market rates of return on investment, but that they ought instead to be derived from economic forecasts and society's conception of distributive justice concerning the allocation of goods and services...

Discounting and Climate Change

Why has discounting been controversial, and why has the controversy been particularly acute in the environmental area? The environmental area forces one to consider long time horizons. In the climate change area, a century is the minimum time horizon to make sense. The same is true about species extinction and biodiversity loss and disposal of nuclear waste. Such time horizons are completely ou...

Discounting for Climate Change

It is well-known that the discount rate is crucially important for estimating the social cost of carbon, a standard indicator for the seriousness of climate change and desirable level of climate policy. The Ramsey equation for the discount rate has three components: the pure rate of time preference, a measure of relative risk aversion, and the rate of growth of per capita consumption. Much of t...

Space-Time Discounting in Climate Change Adaptation

Background: Space-Time Discounting Discounting is typically defined as the process of comparing the values of costs and benefits that occur at different times. This definition neglects where costs and benefits occur. For example, we might discount future costs and benefits because we care less about the welfare of people in the future, but we might also discount the welfare of people in differe...

Stern and his critics on discounting and climate change